Return Journey

Mining baron Anil Agarwal's $1 billion share buyback offer of Vedanta Resources cheered up shareholders in London as the share price shot up by 26 per cent in the morning trade to over 800 pence. The 825 pence a share delisting offer is almost 28 per cent premium to its closing price on June 29.The delisting plan translates into capital benefits to the promoters and will cut some slack to Agarwal's firms exposed to critical scrutiny abroad.

The buyback move, however, failed to spike share prices of the group's two large companies -Vedanta Ltd (VL) and its subsidiary Hindustan Zinc (HZL) - in India. Domestic investors say the move will help only its promoters and the group doesn't need foreign capital for acquiring assets any longer. With $5.6 billion cash reserves on its books (most of it with HZL ($3.4 billion) and VL ($1.1 billion), domestic investors expect the management to use its cash reserves for expansion and debt reduction.

Nevin John